Strike at GM Canada less likely, new offer improves

TORONTO, Sept 15,2002 Scott Anderson writing for Reuters reported that the Canadian Auto Workers union said on Sunday the likelihood of a strike at General Motors of Canada diminished substantially after the carmaker returned to the table with a significantly improved offer from its original one just 48 hours earlier.

Although CAW head Buzz Hargrove said the two sides still faced two days of intense bargaining, he was far more confident that an agreement could be reached by Tuesday at midnight.

"I feel that there is a real light at the end of the tunnel now and it is up to us to make that light grow. We have to do as much work as the company does. If we keep our focus then we can get this done," Hargrove told Reuters.

This is a dramatic turnaround from the tough talk earlier when Hargrove ripped into the company for delivering what he termed "the worst deal" he had ever seen when the first offer was presented on Friday.

At the time, Hargrove panned the contents of the package that included only a 3.0-percent wage hike in the first year, lump sum payments in the remaining two years, cost of living cuts and caps on healthcare benefits.

He raised the likelihood of a strike again earlier on Sunday when he said the company must drastically alter the direction of the offer if it was to show it was serious about averting a strike.

Hargrove refused to divulge the contents of the new offer, but said the 3.0-percent wage increase in the first year was still on the table but the lump sum payments were removed in the remaining two years. A promise of wage increases was added and the cost of living cuts were also removed.

But, the union leader said there was still a long way to go in settling the issues such as work time and wages. The union also wants a commitment from the company on investments at its plants as well as clarifications on the future of some of its other facilities.

"I'm a hell of a lot more optimistic than I was the other day. I was totally pessimistic and I was frustrated because I couldn't understand it. I still don't understand how we got there today. We have still got time," he said.

"There is nothing complicated here. It's just a question of crunching numbers and getting commitments on investment. So it's just about money for the most part."

The union picked GM Canada as the initial target, noting its financial strength as well as its conciliatory attitude.

"I would say that we made a great effort to look at and address every issue that is pretty much on his (Hargrove's) list. There are still things to get to and to work on and we will have to do that over the next 48 hours. It's going to be a lot of hard work, but at this point I don't see any reason why we can't have an agreement by Tuesday night," GM spokesman Stew Low said.

The contracts of the three largest Canadian car companies -- GM, Ford of Canada <F.N> and DaimlerChrysler Canada <DCXGn.DE> <DCX.N> -- are set to expire at midnight on September 17. After a deal is struck with General Motors, the union will name the second target with which it will negotiate. The CAW represents 44,000 workers at the three Canadian companies.

This round of talks marks the first time that the union has held contract talks at a different time from its United Auto Workers counterpart in the United States, where contracts do not expire for another year. Surely the U.S. industry and investors are watching the outcome of the talks closely.

Vehicle and parts production in Canada and the United States are closely linked, so a Canadian strike would have a major impact across North America.

Only the 1993 and 1999 contract negotiations have been settled without strike action.